Traditional rewards (e.g., incentive award, frequency reward, etc.) programs have been around for years. Rewards programs are typically used to help businesses develop and maintain participant rewards and are used as marketing tools to develop new clientele. A frequent flyer program is an example of a typical rewards program, where the more the participant uses a particular airline or group of affiliated airlines the more frequent flyer miles the participant earns. After accumulating frequent flyer miles, the participant may choose to redeem those miles for up-grades in service or free airline tickets. Various forms of these programs have developed over the years, ranging from programs such as “buy 9 get one free” punch cards to more sophisticated credit card rewards systems, where participants are awarded points or cash rebates for using a particular transaction card and/or by using a transaction card with particular merchants or vendors. As competition in various markets increased, companies sought ways to expand rewards programs to appeal to a broader cross-section of potential participants. One way this was accomplished was by developing strategic partnerships and affiliations with other business sectors. For example, hotel chains, airlines and rental car agencies developed rewards program partnerships and affiliations; credit and transaction card companies also joined in to promote a more comprehensive and appealing rewards program. These programs have been successful, but again were limited in that the rewards could only be redeemed within the network of companies in the rewards program affiliation or partnership. For example, U.S. Pat. No. 5,937,391 ('391) owned by Fujitsu Limited; U.S. Pat. Nos. 5,774,870 ('870) and 6,009,412 ('412) owned by Netcentives, Inc.; and U.S. Pat. No. 5,025,372 ('372) owned by Meridian Enterprises (all of which are hereby incorporated by reference) illustrate recent efforts to create more attractive rewards systems.
The '870 and '412 patents both relate to an online, interactive frequency and award redemption program which immediately awards and issues bonus points to a user's awards account in response to that user's online purchase of merchandise. In other words, submission of a purchase order form during an online session results in the calculation and addition of points to an enrolled user's account as well as the display of current account information. The user is then immediately permitted to redeem any or all of the award points in the user's account, including currently awarded points, in that same online session. This system is specifically directed to expediting the award and redemption of points for product rather than cash rewards that can be used to bid on products or services in an online auction. Further, this invention is limited to redeeming points within a redemption network of merchants who accept points.
The '372 patent generally relates to an incentive award program which allocates monetary amounts of credit based on a participant's performance of a designated level of achievement. The monetary amounts can be withheld and/or adjusted by a sponsoring company. Although this system allows for the crediting of a monetary value to a credit instrument, it is limited in that the participant is not able to interact over a computerized network with this system so as to effect a real-time transaction or to affect a real time credit to a credit instrument.
Although many of these programs have been successful in developing participant rewards and incenting participants to act, they have presented participants with limited opportunities to redeem rewards for the products of their choice or have provided participants with limited accessibility and control of their rewards account. Over the past several years, online auctions have become more of a standard for conducting online commerce. Market forces, as demonstrated by the success of online auctions such as eBay®, are looking toward the online auction format to purchase a wide variety of products, services, and experiences at the absolute lowest prices possible. Therefore, a need exists in this industry for a program that provides cash reward participants with an exclusive means to shop and redeem cash rewards toward the purchase of products, services, and experiences at the lowest possible price within the format of an online auction, while offering real-time control of one's cash reward account.